What is the Digital Supply Chain?

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All of the technologies that we hear about every day, from Blockchain to Virtual Reality, have many areas of applicability in both our personal and business lives.

But in the area of Supply Chain, which truly spans the entire operations of most any company, these technologies provide the platform to totally redefine how the work of Supply Chain is conducted every minute of every day.

In the simplest terms, we are entering the age of the Digital Supply Chain!

The Analog Supply Chain

What is analog exactly? Simply put according to techterms.com “analog is an adjective that describes a continuous measurement or transmission of a signal. It is often contrasted with digital, which is how computers store and process data using ones and zeros.”

Old telephones, vinyl records, cassette tapes and 8 track tapes, physical books, VHS tapes, physical pieces of mail, watches with moving hands, and antenna-based televisions are all analog devices, for those of us old enough to remember them.

In this context, an Analog Supply Chain is one in which the tasks are performed in some physical, non-electronic fashion.

In the Analog Supply Chain, planners would receive orders from customers over the phone, by physical mail or by fax. This demand would be translated to bills of material and component requirements through manual or semi-automated means. Product information and parameters would be manually entered into reports and systems. Purchase orders would be written out by hand and mailed or faxed to suppliers with buyers calling suppliers on the phone to tell them about their needs as well as the inevitable changes in demand.

Carriers would be called on the phone to arrange for trucks to pick up and deliver goods. Visibility to where goods were was largely limited to updates that came over the phone. When goods arrived at their destination physical bills of lading were used to corroborate the accuracy of shipments. Inventory was moved into, and out of, warehouse shelves using manual recording tools. Inventory levels were audited with physical counts manually entered into systems.

And invoices were sent out or received, by physical mail with payments transferred via physical cheques or bank transfers accompanied by written authorization.

The entire Analog Supply Chain operated without electronic communication.

Interestingly even though we are in the midst of a general transformation to a Digital Supply Chain world many elements of the Analog Supply Chain still exist in some form.

The Digital Supply Chain

The Digital Supply Chain is the result of the application of electronic technologies to every aspect of the end to end Supply Chain.

Electronic connectivity is at the heart of the Digital Supply Chain as enabled by a plethora of enabling, and disruptive, technologies including:

  • The Internet of Things (IoT)
  • End to End Digital Connectivity
  • Cloud Computing
  • Blockchain
  • Big Data
  • Artificial Intelligence
  • Predictive Analytics
  • Machine Learning
  • Virtual Reality
  • Augmented Reality
  • Voice-Activated Technology
  • Wearable Devices
  • Control Towers
  • Robotics
  • 3D Printing and On-Demand, Additive Manufacturing
  • Cyber Security
  • Autonomous Vehicles
  • Drones
  • Software as a Service (SaaS)
  • and much more

What do all of these technologies have in common? Electronics and electronic, or digital, communication.

A complete deployment of Digital Supply Chain technologies would replace all uses of paper, eliminate all manual data entry and updates, and eliminate the need to request (eg. with a phone call) information because you would already have it at your fingertips.

The deployment of electronic sensors and tracking capabilities will allow for the real-time tracking of the movement of all goods throughout every aspect of the manufacturing, transportation, and logistics processes that permeate any Supply Chain.

End to end electronic connectivity enables performance management and optimization of even the most complicated Supply Chains. By definition, this end-to-end real-time connectivity also means that a Digital Supply Chain will be fully integrated all the way from the Customer through to all levels of Suppliers, inclusive of all functions, with transparency and visibility throughout.

A robust application of tools such as Artificial Intelligence, Big Data, Predictive Analytics, and Digital Control Towers would even support an electronically directed and managed Supply Chain with minimal human intervention.

This means that a Digital Supply Chain, and its underlying processes, can be managed holistically and intelligently with the optimal availability of information on performance, requirements, and overall dynamics.

Process management, material flow, supply and demand planning, resource planning, inventory levels, cash flow, and strategy can all be managed dynamically in a digital world with real-time, global and holistic information ready at hand.

But you must prepare your business to adapt to a Digital Supply Chain world!

Conclusion

It is an exciting time to be a part of the Supply Chain universe. All of these great technologies mean that there will be phenomenal opportunities to shape and participate in the evolution of a Digital Supply Chain world.

In reality, most companies will continue to have aspects of analog technologies built into their Supply Chains. The deployment of the Digital Supply Chain will take a long time for most companies so we can still imagine the future.

And there is nothing wrong with that. Because what is most reassuring is that these digital technologies will be around for a long, long time.

It is most important to recognize that the transformation to a Digital Supply Chain transcends just the technological capabilities. Supply Chain professionals will have to develop a significantly different skill set to define and operate the Digital Supply Chain of the future.